Top commercial property investment tips [revealed]

The average rental falls in the range of 6-10 per cent on commercial properties according to industry experts. We bring you the commercial property investment tips you must factor-in for the success of your investment goals.

While the rental yields on residential properties has been low, the rental yields on office spaces seem promising in the long run depending on choice of location and quality of corporate tenants. The average rental falls in the range of 6-10 per cent on commercial properties as compared to to 3.5 per cent on residential property according to industry experts.

Therefore when it comes to commercial rental yield in India, the demand for good office real estate assets is on the rise owing to imminent possibility of the first REIT listings and employment generation. Offices located in Grade-A buildings, logistics centres and InfoTech parks are generating dependable ROI and steady investors who were mostly likely previously found only in residential property asset classes.

With the upsurge of private equity inflows in 2017, the trend is only likely to continue. Highest rental yields in India are expected with REITs bringing in liquidity into commercial property investment in India. This is expected to further enhance the willingness of developers focused on the commercial office segment to deploy further assets.

The continuing sluggishness on the residential property market prevails in combination with associated re-investment cycle risks. This is also expected to play a major role in driving more investments towards various categories of commercial real estate for commercial rental yield in India.

With good office spaces in smaller cities, corporate have began expanding in Tier-I and Tier-II cities as well. Such assets are often located in areas that support transport of goods and people.

Optimisation of office real estate portfolios in the most efficient ways in the current market scenario is also enhancing economies of scale. Smaller cities are also helping in consolidating operations of corporate at reduced costs. This is being further enhanced by long-term leases to reduce operating costs. They may even look to sell these spaces which would mean quality spaces entering the market where the need for such services is more.

In our commercial property investment tips, it is important to mention that India’s start-up boomm has contributed to employment opportunities and increased investments. Examples are previously established start-ups which are now showing excellent results.

While their initial contribution to commercial space absorption was less, e-commerce companies now account for over three per cent of the annual overall commercial space absorption in India. This is only set to increase provided the enthusiastic consumer response to e-commerce in India.

Start-ups in the retail, manufacturing and InfoTech as well as life sciences and biotech are only increasing the potential. They are becoming the prime beneficiaries of the government’s Digital India initiatives. Note that India has already transformed itself into one of the world’s most promising and prominent destinations for start-ups.

Meanwhile, many start-ups which are focused on the real estate sector have had a positive influence on the highest rental yields in India such that they have brought about a higher saturation of architectural design technology utilisation and modern construction. They have further enhanced transparency and efficiency quotients of research services and real estate brokerage.